[Updated through 2021][Ed. Note – the following guest post is by Lance Wallach. The post originally appeared in Accounting Today on July 1st of this year and is being reprinted here at the request of its author. In his post, Lance details the dangers faced by accountants and others who prepare returns that involve abusive […]
Uncle Sam Goes After Another Welfare Benefit Plan Scheme
by Brian Mahany The IRS and U.S. Department Justice Department have a special relationship with welfare benefit plan promoters and the brokers and insurance agents that sell them. They hate them. For over a decade, the IRS has declared that many welfare benefit plans are fraudulent and abusive tax shelters. Many of the promoters are […]
Feds Target CPA’s, Lawyers – IRS Whistleblower Post
[Post updated March 2021] When this post was written ten years earlier, the Justice Department had just convicted the former chairman of prominent CPA firm BDO Seidman as well as two attorneys from Jenkens and Gilchrist. The three were convicted for for their role in a massive scheme to promote abusive tax shelters. The government […]
U.S. Tax Court Disallows 419A Plan, Upholds Penalties
In a recent U.S. Tax Court case, taxpayers suffered a double loss. The taxpayers, consisting of four couples, had purchased welfare benefit plans marketed by Benistar 419 Plan Services. Under the plan, Benistar provided preretirement life insurance to select employees of companies enrolled in the plan. Small employers like the plans because they allow pretax […]
IRS Makes Enron Whistleblower a Millionaire – Are You Next?
Long before Enron became a household world, an anonymous whistleblower came forward and tipped off authoritiesThe Internal Revenue Service paid an anonymous whistleblower a $1.1 million dollar reward for information about tax fraud at Enron. The award was paid out under the old IRS whistleblower program and represents the then maximum reward. For the same […]
Three Types of Welfare Benefit Plan Frauds
[Post updated May 2021] When this post was first written in 2011, welfare benefit plans were a hot topic with the IRS. Huge penalties – up to $200,000 per year, criminal investigations, civil suits and many, many scams. If getting huge fines from the IRS wasn’t enough, several promoters of these plans managed to get […]